ASIC: Tax agents can provide advice on early superannuation release amid COVID-19


ASIC has announced three temporary relief measures regarding financial advice, including that registered tax agents can now offer existing clients limited financial advice about the early access to superannuation measure, without an Australian Financial Services Licence.

ASIC’s new relief measures go hand in hand with the early release of superannuation relief measure announced in the Federal Government’s second COVID-19 stimulus package.

To help Australians gain sound financial advice about the early release of superannuation, ASIC has:

  • "allowed advice providers not to give a statement of advice (SOA) to clients when providing advice about early access to superannuation;
  • permitted registered tax agents to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services (AFS) licence; and
  • issued a temporary no-action position for superannuation trustees to expand the scope of personal advice that may be provided by, or on behalf of, the superannuation trustee as ‘intra-fund advice’. (Intra-fund advice is provided free of charge to the recipient of the advice.)"

The Tax Institute Senior Tax Counsel, Bob Deutsch said the measure temporarily allowing registered tax agents to provide advice without a financial licence may reignite debate around whether this exemption should be permanent. However, he said that, “given that we’re in the midst of economic upheaval and uncertainty, it may not be the best time to have that conversation.”

There are conditions that must be met when operating under these relief measures. ASIC detailed them as:

  • "clients must be provided with a record of advice (ROA), which meets certain content requirements. An ROA is a shorter, simpler document that sets out the advice that is being provided;
  • the advice fee, if any, is capped at $300;
  • the advice provider must establish that the client is entitled to the early release of their superannuation; and
  • the client must have approached the advice provider for the advice."

Read ASIC’s full statement on the relief measures and related conditions. And to stay up to date on information, changes and support for the tax community, keep an eye on our dedicated COVID-19 economic stimulus page.

“People who choose to access super early should have a clear understanding not just as to what they get in the immediate future (i.e. $20,000 cash - half before 30 June 2020 and half after) but also what they will lose in the longer term in not having that $20,000 working for them in a tax advantaged super environment," Bob said.

"This should be done especially having regard to the client’s current age, years to retirement and life expectancy. The magnitude of that loss should be carefully explained to the client. The client should also be told the limits on getting money back in to super down the track. All these aspects should be in the ROA provided to the client.”

And given the importance of this task and the detail needed in the advice given, he expressed reservations around the fee cap.

“Whether that and everything else (e.g. eligibility criteria etc.) can be explained for no more than $300 will be a challenge if it is done properly. I fear it will be done with little care and no proper regard to that critical balance between “take the money and run” versus “keep the money working for you in super”.”

These relief measures are temporary, but there is no set end date yet. ASIC has stated it will monitor market developments and provide 30 days’ notice to the industry before revoking them.

Want to learn more about superannuation and SMSFs?

Join our National Superannuation Webinars to hear from industry experts.

Session 2 starts on 22 April 2020, with a Contributions Workshop presented by Craig Day, Executive Manager of Colonial First State’s technical services team. You can sign up for individual sessions, or register to attend the whole series to learn about topics ranging from estate planning and pensions, to audits and record keeping.



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